A N T I T R U S T M O D E R N I Z A T I O ... - ncbfaa

32 A N T I T R U S T M O D E R N I Z A T I O N C O M M I S S I O NThe Commission agrees and makes the following recommendations.1. There is no need to revise the antitrust laws to apply different rules to industriesin which innovation, intellectual property, and technological change are centralfeatures.2. In industries in which innovation, intellectual property, and technological changeare central features, just as in other industries, antitrust enforcers should carefullyconsider market dynamics in assessing competitive effects and should ensureproper attention to economic and other characteristics of particular industriesthat may, depending on the facts at issue, have an important bearing on a validantitrust analysis.The economic principles that guide antitrust law remain relevant to and appropriate forthe antitrust analysis of industries in which innovation, intellectual property, and technologicalchange are central features. Antitrust analysis, as refined to incorporate new economiclearning, is sufficiently flexible to provide a sound competitive assessment in suchindustries. This has improved the potential for a sound competitive assessment in allindustries, including those characterized by innovation, intellectual property, and technologicalchange.To be sure, not all agree with the results in particular cases. That antitrust has the propertools for an economically sound analysis of competitive effects does not mean that everyoneagrees on how to use those tools in particular cases or interpret the results of theiruse. Nonetheless, the Commission concluded that current antitrust analysis is up to the taskof properly assessing the competitive effects of business conduct in new economy industries.Just as in other industries, of course, antitrust enforcers evaluating business conduct innew economy industries must ensure proper attention to particular market dynamics andeconomic characteristics that may play a role in determining likely competitive effects.Certain characteristics may arise more frequently in markets in which innovation, intellectualproperty, and technological change are key factors than in some other industries.These characteristics can include:● very high rates of rapid innovation;● falling average costs (on a product, not a firm-wide, basis) over a broad range of output;● relatively modest capital requirements;● quick and frequent entry and exit;● demand-side economies of scale;